Prior to August 2011, Medicaid home care services were obtained through local offices. In 2011, New York State began the process of shifting $6 billion in Medicaid spending on long-term care services (including home health care, personal care, and private duty nursing) to private managed care companies - Medicaid Managed Care Organizations (MCOs). MCOs are health insurance companies that contract with states to provide services in exchange for payment at a "capitated" rate instead of "fee for service". In other words, the State Medicaid program pays the MCO a specified rate per person rather than an hourly rate. The MCO is paid the same amount for an individual receiving 24 hour daily care as for someone receiving care four hours a day. Advocates for the elderly and those with disabilities have maintained that, as a result, companies have been cherry picking only the most lucrative enrollees.
